Onwards to a Brave New World of Fintech
Words from London Society of Chartered Accountants Virsh Paul.
We had our first live event for this year, the Accountants’ Fintech Summit, which took place last month in the Auditorium of the Chartered Accountants Hall in Moorgate Place. It proved, as expected, a not-to-be-missed event.
Fintech is a word that has possibly entered our vocabulary relatively recently. It is an abbreviation, clearly, of Financial Technology. As such, Fintech implies the merging of finance with technology.
Now finance is bread-and-butter for us accountants and technology is something we have been forced into accepting or adopting in our everyday work lives. However, what makes this truly exciting is when the technology starts competing with traditional financial methods in their delivery of financial services. That is what makes this a new financial industry – it applies technology to improve financial activities.
As we learnt it’s all about new applications, processes, products or business models in the financial services industry which has come of age as the Internet has become part of our daily life. What makes this new industry remarkable is the way in which innovation or rather innovative ideas are improving the financial service processes by proposing technology solutions to everyday different business situations. The ideas are creating not only new business models but new businesses.
We heard about some of the innovative ideas and saw where we are at the moment and where we are headed. Our keynote speaker was none other than David Beardmore, who is the EcoSystem Development Director for Open Data Implementation Entity (OBIE) and has played a very key role in open banking which is almost the backbone of the new innovation. David’s role at the OBIE is to lead the growth and development of the open banking ecosystem.
We had the head of the Fintech Hub at the Bank of England, Varun Paul, telling us how they are supporting Fintech innovation. Varun is leading on the Digital Economy including Open Data, Digital ID and Artificial Intelligence and has delivered a review on the Future of Finance, looking at what the Bank could do to enable a financial system in the future which continues to be both innovative and resilient.
The UK has led the world in its deployment of Open Banking we were told. By enabling customers and businesses to share their banking data securely with third-party providers, it is designed to open up the retail banking market to greater competition and it has already enabled customers to access innovative new services.
Perhaps more significantly, by delivering secure, permissioned data portability, it has put end-users in control of their own data. The FCA’s Open Finance initiative will do the same for a wider set of products, including savings and mortgages. And they are both just part of a wider government initiative on Smart Data. Smart data will enable consumers and businesses to harness the power of their data to access innovative and competitive services in the financial system and beyond.
Because this data portability is permissioned by the individual, decentralised and minimises the replication of data across the system, it is actually privacy-enhancing. And partnered with a similarly privacy-enhancing system of digital identity, could take us a whole lot closer to the digital economy of the future.
Helen Panzarino not only spoke to us but moderated an exciting panel made up of representatives from the FCA, Wise (formerly Transferwise), Funding Options and our VP Grant Jones who looks after Fintech clients.
Originally a Commercial Banker, Helene, is an Associate Director with the Centre for Digital Banking and Finance in LIBF where she was instrumental in the creation of a new professional qualification, the Certificate in FinTech Practitioner, part of the Vacuumlabs solutions house Community Bank team, and an experienced FinTech Programme Director, exited entrepreneur, educator and author.
We rounded up the event with a true success story from James Lynn co-founder of Currensea. Currensea is the UK’s first Direct Debit Travel Card. It links to your bank account allowing you to spend abroad without the normal overseas charges and fees, or the need to top-up a pre-paid card. Acting as a layer in front of your current bank account, it saves you money, gives you extra security and makes your bank work that bit harder for you.
The summit itself was innovative in that this was the first event we had organised on a face-to-face basis after a long time, and we were very pleased that a number of our members made the effort to attend in person.
The financial system is changing. Everywhere you look, it is plain to see. For the past few years, we have been riding a wave of technological innovation. And it shows no sign of ending soon. The changes have been most apparent perhaps in the consumer-facing field of payments, but this is likely just the beginning.
I am sure I am not alone in thinking that Fintech is going to affect all of our lives. Hopefully, those of us who attended the summit will have a better understanding of the new world of financial technology as we all come to terms with our role in the midst of this new industrial revolution in which we will have some part to play, I’m sure.
By. Viresh Paul, London Society of Chartered Accountants President